Withdrawal from securities lending enhances rating
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Withdrawal from securities lending enhances rating 30 September 2010Oldwick Reporter: Justin Lawson
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A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of A (Excellent) and issuer credit rating of "a" of COPIC Insurance Company (COPIC) (Denver, CO).
The revised outlook reflects COPIC's improved level of risk-adjusted capitalization that has arisen from profitable underwriting results and a continuous stream of net investment income. Furthermore, the impact of COPIC's investment portfolio on total returns has improved as a result of realized capital gains and the company's ongoing withdrawal from a securities lending program.
In addition to COPIC's excellent risk-adjusted capital position and strong operating performance, the ratings reflect the company's conservative underwriting leverage and its leadership position in the Colorado medical professional liability market. COPIC also maintains an exceptionally high policyholder retention level, which is supported by the company's distribution of favorable operating results to its policyholders and its value added offerings to its insureds.
These positive rating factors are partially offset by COPIC's geographic and business concentration. Furthermore, the company maintains a high common stock leverage position, which has contributed to the historical variability that is evident in its operating results. However, given its current capital position, COPIC is expected to be able to absorb this volatility without a material impact to its balance sheet strength.
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